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Ethereum Classic’s Fifth Halving Today — How Will ETC Price React?

Published May 31, 2024 10:48 AM
Valdrin Tahiri
Published May 31, 2024 10:48 AM

Key Takeaways

  • Ethereum Classic’s fifth halving will be on May 31, 2024, reducing block rewards to 2.048 ETC.
  • The ETC price has traded 80% below its all-time high of $158 and 20% below its yearly high of $39.
  • Will Ethereum Classic’s price react to its fifth halving the same way it did to the previous ones?

Ethereum Classic has increased over 60% since the beginning of the year, breaking out from its main horizontal resistance area. However, it still trades below its main diagonal resistance.

With its fifth halving today on May 31, examining the reaction to previous halvings can help determine if ETC will break out from this resistance, or if it will get rejected instead.

How Did Ethereum Classic React to Previous Halvings?

Ethereum Classic was created as a result of a split in the Ethereum community. The split resulted in response to disagreements regarding “The DAO” hack in 2016. Those that believed Ethereum should not hard fork to roll back the exploit continued supporting the chain. So, Ethereum Classic is in fact the original Ethereum blockchain, while the forked blockchain is Ethereum.

Needless to say, Ethereum has performed much better, increasing by 35,000% since August 2016 while ETC has increased by roughly 1,400%.

Nevertheless, Ethereum Classic still ranks as the 25th# biggest cryptocurrency based in its market capitalization. Since it uses a Proof-of-Work consensus mechanism, ETC undergoes halvings.

Its halvings reduce block rewards by 20% roughly every two years, or more specifically every 5 million blocks. Ethereum Classic’s initial block reward was 4 ETC, and the next halving will reduce it to 2.048 ETC.

The previous ETC  halvings were on June 30, 2015, December 11, 2017, March 17, 2020 and April 25, 2022. The first one coincided with the creation of ETH, so it is not shown in the chart.

In December 2017 (red), the ETC price reached its top shortly after the halving and began a lengthy correction. The bottom was reached 357 days after the halving.

In March 202, the halving coincided with the market bottom (green). The ETC price began to increase almost immediately afterward and culminated with a new all-time high 410 days after the halving.

Ethereum Classic Previous Halvings
ETC/USD Weekly Chart | Credit: TradingView

In May 2022 (white), ETC was mired in a downtrend that persisted for another 406 days. Although the price briefly dipped to a slightly lower low in June 2022, this was just a wick low, and ETC bottomed out in June 2023, 406 days after the Ethereum Classic halving.

So, between 360-410 days after each halving, the market consistently hits a significant top or bottom, depending on the prevailing price trend. Following previous patterns, we can expect the ETC price to reach a new high roughly 400 days after the halving, around July 2025.

ETC Consolidates Above Support

The weekly time frame ETC price chart gives mixed readings. On the bullish side, ETC has broken out from the $24 horizontal resistance area and validated it as support (green icon). The $24 area is important since it previously provided resistance for over a year.

Despite the breakout, ETC failed to move above a long-term descending resistance trend line. The trend line has existed for nearly 800 days, rejecting the ETC price four times.

ETC Price Weekly Movement
ETC/USDT Weekly Chart | Credit: TradingView

The weekly RSI and MACD are both neutral, in line with the price action. The indicators are both down trending, though the MACD is above 0 and the RSI is above 50. These conflicting signs further add to the neutral sentiment.

ETC Price Prediction: Is the Correction Over?

The wave count from the daily time frame chart shows that the price has completed an A-B-C corrective structure in April and March (black). In it, waves A:C had an exactly 1:1 ratio, the most common in such structures.

The ETC price has increased since the correction ended on April 13. On May 20, it broke out from a descending resistance trend line that had existed since the yearly high. This confirmed the end of the downtrend.

ETC Correction
ETC/USD Daily Chart | Credit: TradingView

Afterward, ETC validated the trend line as support twice (green icons), a common movement after breakouts. So, the daily time frame suggests that ETC has begun an upward trend.

If this is the case, a breakout from the long-term resistance trend line is the most likely scenario, taking ETC toward the next long-term resistance at $40.

Ethereum Classic Can Begin Uptrend After Halving

The previous Ethereum Classic halvings had the common pattern that the price reached either an absolute top or an absolute bottom roughly 400 days after the event. Currently, ETC is likely in an upward trend. A breakout from the long-term descending resistance trend line will confirm this. If previous trends continue, ETC will reach its market top by July 2024.

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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